A federal court in Virginia recently held that in insurer had a duty to defend against class-action allegations that it posted confidential medical records on the internet. Travelers Indem. Co. of America v. Portal Healthcare Solutions, LLC, 2014 WL 3887797 (E.D. Va. Aug. 7, 2014).
After a class action lawsuit was filed alleging that the insured posted confidential medical records online, its insurer sought a declaration that it had no duty to defend the insured in the class action lawsuit. The insurer argued that the posting of medical information was not a “publication” and there was no “unreasonable publicity” or “disclosure” (as was generally required for coverage to arise) because there were no allegations in the underlying lawsuit that a third party actually viewed the information.
Granting the insured’s motion for summary judgment, the court held that the insurer did have a duty to defend, reasoning that “publication” occurs when information is placed before the public, not just when a member of the public reads the information before it. Further, the court determined that there had been “publicity” and “disclosure” in that the records had been made available online, where any member of the public could view the same.